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Old 16th May 2012, 13:04   #601
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

An excellent, crisp point of view. Thanks!

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Originally Posted by RS_DEL View Post
@Mods: Forgive me for this OT response but the context is relevant.
The same scenario will repeat itself with respect to the energy policies of the GOI. It is only then, we will see an energy policy that stands the test of economic good sense.

My rant is over. Thank you for reading.

Sarkar tera Maa Baap Hai syndrome??
Sad, but true - only education from the lowest level can clean this place up.

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Hello Shankar,

Also Indian people are suppressed & used to this style of living since centuries & in their mind "Sarkar" is next to God.

Thanks,
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Old 16th May 2012, 13:07   #602
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Unhappy re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by aseem View Post
Reading this thread I cant help but think of the case of sour grapes. Its unfortunate to see bhpians with petrol cars advocating against diesel subsidy in a country where public transport is in a sad state. Diesel is not really being subsidized, rather its ideally priced. If I am the govt, and I have state run PSU's. I see for every litre of diesel I charge excise, state tax that amounts for nearly 15-20 Rs than than I subsidize the fuel by 10 Rs by paying money to the oil PSU's, am I really giving subsidy?
What would be the gain by such a mechanism?
It artificially boosts both revenue (from OMC taxes) and expenditure (subsidies). It would make more sense to keep tax rate fixes (rs/ltr) or variable (to keep the pump prices constant).

There would be some sense if there an aota of benefit to the actual user.
All one can see is increasing subsidies (i.e. Govt. out go) and ever widening fiscal deficit.
At some threshold, it would become viable / economical to run two wheelers on diesel (not to mention about cars). Even at that point, morons may still keep talking about petrol as "richman's fuel".
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Old 16th May 2012, 19:08   #603
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by aseem View Post
Diesel is not really being subsidized, rather its ideally priced. If I am the govt, and I have state run PSU's. I see for every litre of diesel I charge excise, state tax that amounts for nearly 15-20 Rs than than I subsidize the fuel by 10 Rs by paying money to the oil PSU's, am I really giving subsidy?

I would rather we spend more time and energy discussing that Petrol should be taxed less than discuss the misnomer of diesel being subsidized where in essence is just not how some folks would want you to believe.
Have a quick look at this for starters
Subsidised oil is bleeding us: Rs 21 cr losses every hour! | Firstpost

This thread is about rationalising diesel prices, so unless we want a comparison why should we talk of petrol?

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Originally Posted by Jignesh View Post
Also Indian people are suppressed & used to this style of living since centuries & in their mind "Sarkar" is next to God.
This I agree with. As a people, we do need to have some royalty dont we? In terms of clans & dynasties. Why else would politicos & film star kids with no real talent continue and thrive in the same field?
Only due to their clout. Be it politics or the film studios.

Have we seen a middle class politician after Shri Lal Bahadur Shastri? I am more than happy to be corrected if my example is incorrect!

Last edited by selfdrive : 16th May 2012 at 19:10. Reason: added quote
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Old 16th May 2012, 19:24   #604
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by selfdrive View Post
Have a quick look at this for starters
Subsidised oil is bleeding us: Rs 21 cr losses every hour! | Firstpost

This thread is about rationalising diesel prices, so unless we want a comparison why should we talk of petrol?

Read this article:
Petrol could cost Rs 15 less if Delhi follows Goa's lead - Times Of India

"Central and state taxes make up nearly half of petrol's pump price. The Centre levies a specific excise duty of Rs 14.35 a litre and 3% education cess to mop up Rs 14.78 out of Rs 65.64 a litre that consumers pay for a litre of petrol in Delhi."

Taxes are even higher in states like Karnataka. Now call it what you may... but every time price of fuel goes up, goverment earns more in taxes. They dont pass the benefit to us. Than they indirectly provide subsidy to State owned oil PSU's. So they are really just taking from one hand and giving some back from the other... Only difference being, they keep mum on the taking part, but make a gung ho in the news papers about the giving part.

Last edited by aseem : 16th May 2012 at 19:28.
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Old 16th May 2012, 19:38   #605
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by aseem View Post
We have discussed how the fuel prices are high due to the absurd taxes levied by state and central governments, and in some cases octroi charges by city corporations. None of this is paid back to the OMCs.
The diesel tax structure is less than the petrol one. Taxes as a % earn more income for the govt than if it was a flat rupee rate. All agreed.

But I still dont get it. Why are you bringing petrol prices in this discussion?
The topic here is why diesel prices need to be rationalised.

The article link I provided earlier states that this now crosses the food subsidy bill and is pegged at 81K crores. Which indicates that diesel is being subsidised. Isnt that a huge number to be playing with?
Basically sacrificing the economy at the altar of politics. Its not something that can be done at one shot, so the earlier the corrections are started the better.

There could be some other thread elsewhere on the forum for petrol prices. If I remember there was an analysis conducted by one of our fellow bhpians for this. Perhaps someone can provide a link?

Last edited by selfdrive : 16th May 2012 at 19:40.
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Old 17th May 2012, 00:42   #606
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by aseem View Post
Reading this thread I cant help but think of the case of sour grapes. Its unfortunate to see bhpians with petrol cars advocating against diesel subsidy in a country where public transport is in a sad state. Diesel is not really being subsidized, rather its ideally priced. If I am the govt, and I have state run PSU's. I see for every litre of diesel I charge excise, state tax that amounts for nearly 15-20 Rs than than I subsidize the fuel by 10 Rs by paying money to the oil PSU's, am I really giving subsidy?

I would rather we spend more time and energy discussing that Petrol should be taxed less than discuss the misnomer of diesel being subsidized where in essence is just not how some folks would want you to believe.
+1 to this.


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Originally Posted by selfdrive View Post
But I still dont get it. Why are you bringing petrol prices in this discussion?
The topic here is why diesel prices need to be rationalised.
The problems is a lot of petrol-heads keep cribbing about the diesel - petrol price gap as if it is because of the diesel vehicle owners, that the petrol vehicle owners are paying the price. Or by increasing the prices of diesel to petrol levels, all problems would be solved!! Which is absurd.

@Jignesh did it twice in this thread, another user @civic-sense keeps stating on similar lines again and again, even after when people have explained it back to him. And so many more (have done the same). Hence the reference (again and again) to petrol when the thread itself talks about diesel.

But to talk about rationalizing diesel prices, there isn't really much. De-regulation is such a mis-guided term in our country. Petrol price is still being regulated by the government. As for diesel, even after de-regulation, the price might jump a few odd Rs, the rest of the difference is as you know, taxes. And that for obvious reasons, would not change for some time atleast. Instead what we should be talking about is how to get the government to reduce the taxes on petrol, which @aseem rightly pointed out.

All of us have to face one clear fact - petrol buyers are cash cow for the government (via taxes) - they are not going to stop milking it on their own. We have to fight against it.

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Originally Posted by selfdrive View Post
The article link I provided earlier states that this now crosses the food subsidy bill and is pegged at 81K crores. Which indicates that diesel is being subsidised. Isnt that a huge number to be playing with?
As for the article you posted above, and so many more online, you need to understand that the oil companies are talking about potential "revenue losses" (also referred as "under-recoveries" in other articles), not actual losses. That term can be extended to any length. Hypothetically, petrol price could reach 100Rs in 2 years. So in that manner we are talking of a potential revenue loss of 25-30Rs per liter as of today.

Quote:
Originally Posted by selfdrive View Post
There could be some other thread elsewhere on the forum for petrol prices. If I remember there was an analysis conducted by one of our fellow bhpians for this. Perhaps someone can provide a link?
As for the thread you are talking about, actually there are several, but the best one is this (Fuel Pricing in India. Detailed Robbery Analysis.) by @antz.bin.

Last edited by ninjatalli : 17th May 2012 at 00:48.
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Old 17th May 2012, 09:36   #607
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Now let us see, how long before they are forced to do something about the crazy pricing. Rupee in free fall, stock market in free fall, business confidence down to zero (if not negative), ratings on the downwards slope. The FM (current or the new one if the current one vanishes up Raisina Hill) will be forced to do something (I hope). He is being p%g headed (or should I say behaving like the cross between a horse and a donkey!) on GAAR. I am not arguing the logic, but the market perception is there for all to see.

In my simple view: i. you made a law which you thought should get you big money as tax, ii. the other chap thought your perception was wrong, iii. The highest court of the land agrees with him.

Now if you made a mistake you do not compound it. What were all the highly paid babus you have doing, if they could not draft a proper law! How about getting rid of the lot, and taking your medicine (howsoever bitter) with grace.

Last edited by sgiitk : 17th May 2012 at 09:37.
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Old 17th May 2012, 11:49   #608
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Quote:
Originally Posted by ninjatalli

+1 to this.

The problems is a lot of petrol-heads keep cribbing about the diesel - petrol price gap as if it is because of the diesel vehicle owners, that the petrol vehicle owners are paying the price

De-regulation is such a mis-guided term in our country. Petrol price is still being regulated by the government. As for diesel, even after de-regulation, the price might jump a few odd Rs, the rest of the difference is as you know, taxes. And that for obvious reasons, would not change for some time atleast. Instead what we should be talking about is how to get the government to reduce the taxes on petrol, which @aseem rightly pointed out.

All of us have to face one clear fact - petrol buyers are cash cow for the government (via taxes) - they are not going to stop milking it on their own. We have to fight against it.

As for the article you posted above, and so many more online, you need to understand that the oil companies are talking about potential "revenue losses" (also referred as "under-recoveries" in other articles), not actual losses.
Agree that the diesel vs petrol debate is misplaced here. In fact, since diesel cars are more fuel efficient than petrol one, there is a case to be made for encouraging them to get our overall oil import bill down (perhaps by having lower excise duty on diesel vehicles.) But the point that diesel is under taxed in India and that the diesel subsidy hurts is a real one which can't be wished away. The GoI has a fiscal deficit of 5% of gdp, after considering taxes on diesel but before considering a large part of the subsidy, which is off balance sheet as it appears only on the books of the oil cos. The oil cos have been treating amounts as receivables from the government which the government does not show as borrowings in its accounts. Similarly, most states too run a deficit despite the fuel taxes they collect. So if accounted correctly, the impact of the diesel subsidy on the fiscal condition of india is real. There is a gap to be bridged, either by raising diesel prices or raising other taxes or reducing expenditure. Instead of doing any one of these, the goi is resorting to fraudulent accounting and printing notes, which is taking India back to the pre 1991 era. Which is why all the big business houses are hedging their India exposure by investing abroad. And ordinary Indians with Rupee savings will be left holding the baby.

Last edited by Hayek : 17th May 2012 at 11:55.
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Old 17th May 2012, 11:59   #609
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

This scenario seems truly horrible. So where is the much touted fiscal responsibility of our aged politicos?

Many companies are indeed investing in growing markets like South America Africa and Australia - especially in the natural resource mining and management areas.

If the super wealthy of India and their companies quietly keep moving their funds and investments out of the country then what do regular guys like us do? Its a frightening scenario -the bubble is sure to burst one day soon and like you say, we will be left holding the baby!




Quote:
Originally Posted by Hayek View Post
Agree that the diesel vs petrol debate is misplaced here. In fact, since diesel cars are more fuel efficient than petrol one, there is a case to be made for encouraging them to get our overall oil import bill down (perhaps by having lower excise duty on diesel vehicles.) But the point that diesel is under taxed in India and that the diesel subsidy hurts is a real one which can't be wished away. The GoI has a fiscal deficit of 5% of gdp, after considering taxes on diesel but before considering a large part of the subsidy, which is off balance sheet as it appears only on the books of the oil cos. The oil cos have been treating amounts as receivables from the government which the government does not show as borrowings in its accounts. Similarly, most states too run a deficit despite the fuel taxes they collect. So if accounted correctly, the impact of the diesel subsidy on the fiscal condition of india is real. There is a gap to be bridged, either by raising diesel prices or raising other taxes or reducing expenditure. Instead of doing any one of these, the goi is resorting to fraudulent accounting and printing notes, which is taking India back to the pre 1991 era. Which is why all the big business houses are hedging their India exposure by investing abroad. And ordinary Indians with Rupee savings will be left holding the baby.
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Old 17th May 2012, 12:17   #610
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by ninjatalli View Post
As for the thread you are talking about, actually there are several, but the best one is this (Fuel Pricing in India. Detailed Robbery Analysis.) by @antz.bin.
yes, this is the one. thanks for the link!

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Originally Posted by ninjatalli View Post
@Jignesh did it twice in this thread, another user @civic-sense keeps stating on similar lines again and again, even after when people have explained it back to him. And so many more (have done the same). Hence the reference (again and again) to petrol when the thread itself talks about diesel.
I have not mentioned anything about petrol in my post. Isnt this getting a bit defensive by making it a petrol owner vs diesel owner debate? Of course everyone will think the fuel they use should be subsidised more. But lets try taking a practical macro view, not an emotional micro view.

There was a time some years ago when diesel was priced about 30 and petrol around 40, give or take a few rupees. considering our govt is so fond of percentages (as in the way fuel is taxed) even the subsidy should have been allocated in a balanced way. It does not make sense in terms of the economy to leave diesel untouched and keep hiking petrol. Its not helping anything. It would be better to have small hikes on any fuel than a 9rs hike, for cookies sake is around 13%. Our annual pay hikes are probably half of that!

At the same time, I am not saying petrol should not be hiked. Hike it if it hits the subsidy bill. But please do something about diesel, as it is hitting the economy hard. Most of the decisions seem to be taken with vote bank politics in mind and that is what I have an issue with.
And if someone comes up with increase in commodity prices, there is a post somewhere on this thread by Hayek (maybe using an example of cement). Come on, if veggie prices have increased 61% without a diesel price hike, does the problem not lie elsewhere too?

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Originally Posted by ninjatalli View Post
Instead what we should be talking about is how to get the government to reduce the taxes on petrol, which @aseem rightly pointed out.
yes, not only petrol, but diesel too. The loot is exaggerated by the fact that taxes are charged as % values. why, does anyone know? and what happens to these taxes, where do they go?

In the long term, one may say; more emphasis needs to be on mass transit infrastructure. But once people are used to having their cars how many will switch over unless it promises safety, quality, frequency and punctuality? Along with penetrative reach of routes.

Dwindling resources are always going to become costlier. The long term solution may be in looking at other sources for energy. And the only ones I can think of are the sun, moon and wind. none of which are currently feasible for private transport. But humanity as a whole has been living too comfortably for our means. In fact at current rates, we are already 50% short.
I remember seeing an ad a few years ago which said, we have inherited the world from our ancestors, but we have nearly borrowed it from our children. may have been an UNICEF ad. I digress. so I stop
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Old 18th May 2012, 17:15   #611
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

The government; whether State or Central; always looks for easy prey while raising taxes. There are many pretexts, but the result is the same, "we want to capitalize the revenue". Be it Cigarettes, or Liquor or Petrol. If the Government was intent on reducing consumption, it would take various non fiscal measures. Instead it takes the easier way out - TAX the poor consumer to the hilt.

This phenomenon is also seen in how the Police behave. Instead of putting effort in reducing crime, they try to profit from it. Right from the policeman who will ambush you when you are speeding (instead of standing out in open so that you automatically reduce the speed), to having quotas for collecting fines (yes they do have a target).

So I do not think that the Government will ever reduce the so called "Subsidized" diesel, as odd; in form of the opposition - politicians, transporters and other groups; are stacked against us poor petrol heads, who have no say, while the diesel lobby is extremely vociferous. So we need a change of emphasis in the Governance from the Colonial view where the masses have to be contained & repressed to a view that the masses have to be governed and given a fair deal.

Last edited by Aroy : 18th May 2012 at 17:18.
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Old 18th May 2012, 18:02   #612
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

I think the govt should redraft the law that sun films are allowed and then tax them heavily to make some money.

Seriously, I was watching a video about Reagan about how he cut taxes to get out of recession and it worked. The govt needs to work differently for economic development and not think only about taxes for development. (existing taxes will bring money if the economy grows)

Australia is worried that it will not make money on iron ore and other minerals because India doesnt want to industrialize. China has reached the point of post industrialization.

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Old 18th May 2012, 18:25   #613
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

I would really look forward to rationalize Petrol Too. Petrol is no more a "rich man fuel". Diesel and Petrol must be proced equally, so that at least the diesel engines are more fuel efficient.

The best way is to levy a tax and continue the subsidy on diesel. I for one am ready to pay even 20% tax on a diesel car. Trucks and Buses can be omitted from this rule, maybe even commercial trucks and lorries. Instead of looking at just diesel consumption, Gove can focus on alternate fuels somewhat like below

Govt must promote Solar Power also. For example Chennai is a place with heavy heat and sunlight. Solar energy to power cellphone towers or at least a part of it would result in lesser consumption of diesel. Prius and Civic hybrid must be exempted from all tax. It must be just exshowroom + insurance. This would promote more people to buy Hybrid cars and manufacturers to launch hybrids in india. Tax must be reduced on vehicles with technologies like Micro-hybrid (to be provided without a "off" switch). This would increase mileage and reduce the amount of diesel consumed thereby reducing the burden on subsidy.

Last edited by scopriobharath : 18th May 2012 at 18:35.
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Old 18th May 2012, 18:38   #614
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Increase fines 5/10 fold and keep an incentive for cops as high as 50%.
Isn't this indirectly promoting bribery? And why do you think a corrupt cop will honestly keep 50% in his pocket and donate the rest to the government? Instead why won't they uniformly impose fines on all violating traffic rules. Cops are scared to death of all the public transport unions who willfully violate traffic rules hence the private vehicle owners too think that they should not be fined. To me if they honestly fined every traffic violation regardless of political color or position, even with the current traffic fines, the governments will collect enough for their budgetary needs.

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So basically If a two wheeler rider without helmet, riding on the footpath on the wrong side of the road in high beam and honking at pedestrians, must be fined Rs 15,000/- (3000 per offence) .
You gotta be kidding me. Rs 3K per offence. The poor guy will have to sell off that bike. Again impose the rules and fines already on the book without taking bribes and traffic violations will automatically come down.

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In the same light of this if the cars that violate 50/70 rule are fined 10,000 per offence (bribe 5000) I am sure the car owner would eventually out of frustration remove the dark film or fall in line with 50/70 rule.
Again . If they announced that value I will anyway take off my films because they cost just about that. I don't know how would that help though because the government will spend much more in announcing these fines than what they would be able to collect. I am sorry to say your solutions do sound like random governance to me.

But in related news Oil hits 2012 low under $107 on euro zone turmoil | Reuters.

Brent is now below $107 and if Greece does exit the Euro it should come down to $80 as per predictions. Are the OMCs still clamoring about under-recoveries?
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Old 18th May 2012, 18:53   #615
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Isn't this indirectly promoting bribery? And why do you think a corrupt cop will honestly keep 50% in his pocket and donate the rest to the government? Instead why won't they uniformly impose fines on all violating traffic rules. Cops are scared to death of all the public transport unions who willfully violate traffic rules hence the private vehicle owners too think that they should not be fined. To me if they honestly fined every traffic violation regardless of political color or position, even with the current traffic fines, the governments will collect enough for their budgetary needs.

You gotta be kidding me. Rs 3K per offence. The poor guy will have to sell off that bike. Again impose the rules and fines already on the book without taking bribes and traffic violations will automatically come down.

Again . If they announced that value I will anyway take off my films because they cost just about that. I don't know how would that help though because the government will spend much more in announcing these fines than what they would be able to collect. I am sorry to say your solutions do sound like random governance to me.

But in related news Oil hits 2012 low under $107 on euro zone turmoil | Reuters.

Brent is now below $107 and if Greece does exit the Euro it should come down to $80 as per predictions. Are the OMCs still clamoring about under-recoveries?
Cops Must Enforce it and Cops need not fear about Unions breaking the law. If its a law and anyone has to abide by it. If one person who is doing wrong in the union is say fined / jailed for a traffic offence, ALL would fall in line. I am scolded with bad words for stopping at a red-Signal. I expect that at the very least i do not be scolded at for following rules. Let people break them. I am no gandhi or Nehru or Anna Hazare to correct the world. I just want to be given the freedeom to me to follow traffic rules.

3,000 is more of a detterent. Measly 100s and 200s dont do any good. I see so many traffic violations even when cops are manning signals. People have lost the respect and fear of a policeman now-a-days. If a person cannot afford the fine he better follow traffic rules, else not ride a vehicle.

10,000 fine must be for those who have Black Opaque films. 50.70 VLT filmed cars must be let go scott-free.

All the above IF the Goverment wants to enforce some discipline at all. If the govt just wants to harrass the common mna / tax payer, Then i take back all my posts posted so far.
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